January 27, 2014 / 12:32 PM / 5 years ago

Workers urge Volkswagen to build new model at Hanover plant

HANOVER, Germany (Reuters) - Workers at Volkswagen’s (VOWG_p.DE) Hanover assembly plant are demanding the carmaker build a new model at the site to safeguard jobs as it may lose an order for Porsche’s Panamera, a VW labour leader said.

Visitors look at the Volkswagen Passat Blue Motion Concept during the North American International Auto Show in Detroit, Michigan January 15, 2014. REUTERS/Joshua Lott

More than 14,000 workers assemble the T5 multivan and the Amarok pick-up truck at the German site, one of VW’s biggest European assembly plants, as well as welding and painting the bodies of the four-door Panamera coupe.

However capacity utilisation is running at no more than 70 percent, Thomas Zwiebler, head of the plant’s works council, told Reuters, reflecting declining commercial-vehicle demand in key European markets.

The plant may also lose the Panamera order from about 2016 as Porsche, which is owned by VW, may focus production of the Panamera’s next generation at its own factory in Leipzig, sources have said.

“Porsche may well want the Panamera in Leipzig. We can imagine that too pretty well, but only if there is adequate compensation,” Zwiebler, who sits on VW’s 20-member supervisory board, said in an interview.

“We need a second volume model besides the T5,” he added, calling for a decision on a new model by the middle of the year when temporary workers’ contracts will be up for renewal.

A spokesman for Wolfsburg-based VW, Europe’s biggest automaker by volume, declined to comment on Zwiebler’s remarks, the prospect of a new model at the plant or about jobs.

The maker of the Golf hatchback has weathered Europe’s six-year market slump better than rivals PSA Peugeot Citroen (PEUP.PA) and Fiat FIA.MI, averting job losses or factory closures while keeping up spending on R&D. It countered declining sales in Europe with a strong performance in China.

European car registrations have been rising since last September, however, sparking hopes among carmakers for a return to low single-digit sales growth in 2014.

Despite specialising in commercial vehicles, the Hanover plant - VW’s second-largest German assembly factory after Wolfsburg - has failed to get the nod to build the next generation of the brand’s Crafter van, Zwiebler said, citing the plant’s capacity limits.

VW is considering building a new factory in Poland near its site in Poznan to assemble the Crafter which has been produced by rival Daimler (DAIGn.DE) since 2005 under a co-operation agreement, sources have said.

A decision on Crafter production will probably be taken at VW’s next supervisory board meeting on February 21, Zwiebler said.

VW currently produces between 140,000 and 150,000 T5 multivans per year in Hanover, between 30,000 and 35,000 Amarok models and over 20,000 Panamera bodies, another VW spokesman said.

Reporting by Andreas Cremer and Jan Schwartz; Editing by Pravin Char

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